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A leading Indian cryptocurrency exchange, Coinsecure, reported that 438 bitcoins worth about Rs 20.5 crore ($3.3 million) have been stolen from its wallet. The exchange was in the process of retrieving bitcoin to make payments to customers when it discovered the alleged theft.

The company’s CEO Mohit Kalra in a statement has accused his CSO Dr Amitabh Saxena of stealing the bitcoins, and he has also filed a complaint with the cyber cell of the Delhi Police.

“Our system itself has never been compromised or hacked, and the current issue points towards losses caused during an exercise to extract BTG (Bitcoin Gold) to distribute to our customers, ” Coinsecure CEO said in its statement.

“Our CSO, Dr. Amitabh Saxena, was extracting BTG and he claims that funds have been lost in the process during the extraction of the private keys,” the statement added.

In the police complaint, Coinsecure, however, said that it did not believe the statement of its CSO that the wallet lost the bitcoins due to an “attack” on the wallet. The company alleged that Saxena could be making up a story to divert attention and he had played a role in this incident.

The company has asked Delhi Police to seize the CSO’s passport else there is a risk of him flying out of the country soon.

Apparently only Kalra and Saxena had private keys to the exchange’s main wallet.

The latest incident could come in as a major setback to the bitcoin industry which has been battling regulatory issues in India.

Last week, RBI had issued a directive to banks and other entities regulated by it to stop dealing with cryptocurrency companies like wallets and exchanges. The RBI decision had attracted criticism from the crypto industry, which according to certain estimates, has some 50 lakh Indians who have collectively invested about $2 billion dollars. Following this directive, much of this is likely to be redeemed/unwound.